Google employees set to cash in
Published: 20 Aug 2004 10:25 BST
Google employees may not have six- or seven-figure bank accounts yet, but a number of them are gearing up to play the part.
Secretaries to executives may soon find themselves holding a small fortune, after Google launched its long-awaited initial public offering. And although the vast majority of employees to executives will not be able to cash in their options until the lock-up expires 30 days and 90 days after the IPO, some are laying the groundwork for big-ticket items.
"We have some clients in Mountain View who are Google employees. They've been talking about buying a house someday, and now they're thinking now's the time to buy," said Myrt Bauer, real estate broker and owner of Windermere Silicon Valley Properties. "They are just now beginning to be active in their search."
Real estate isn't the only area Google employees are checking out. At least one Google worker has ordered a $90,000 car at a Bay Area dealership, said a source familiar with the company.
Another employee is turning an eye toward opening a winery, while still another is looking at snapping up collectible art, the source added.
And with any transaction, there are buyers and sellers. Google's IPO is also bringing out the latter.
Money managers from a variety of institutions are pitching their services to long-time Google employees, in some cases calling three to four times a day.
For sellers of big-ticket items, patience can be a virtue.
"Once the IPO goes off, our car sales will go up. We sell a lot of employees their cars already," said Adam Simms, Toyota Sunnyvale general manager, who noted the Prius hybrid is a popular model with tech workers.
Yachts and power boats, however, may not catch the tailwind of a Google IPO, unlike in the days of the dot-com boom.
"Most of our clients are high up in management, chief executives or owners," said Don Happel, service manager at D'Anna Yacht Centre. "It's not uncommon to see a guy come in who's 50 or 60 and just sold his company, where he suddenly got a large influx of cash."
That's in sharp contrast to the dot-com days, when Happel sold a 46-foot power boat to someone in his thirties.
"I sold a $600,000 boat at the time to a kid who was about 32. He comes in driving a [1980] Chevy Vega, and he's looking at pretty expensive stuff. I asked him what kind of finance options he had and he said, 'I don't have a credit history.' The next time he comes in driving a...BMW. He had just cashed out. In the end, we financed 50 percent."
Money managers offer words of caution to the soon-to-be nouveau riche.
"One fundamental thing is that wealth creates a false illusion of, 'If I have this money, I'll be content and I'll be happy,'" said George Hester, chief executive of Navitas financial managers.
"We have a saying in the South that pigs get fat, hogs get slaughtered," he added. "You have to come to the point where you're looking at wealth and make a decision of how much is right for you and how much is right for your children. You don't have to try to hit the home runs."
Craig Silverstein, Google's director of technology and third employee, struck a casual pose at the prospects of sudden, immense wealth.
When asked last winter what he would do after Google's IPO, he said he'd consulted a book about lottery winners that contained the dos and don'ts of the privileged class.
Number one on the list was a directive to take yourself out for a nice dinner. Number 10 was a warning against buying a boat.
"I'll do both of those things," Silverstein said at the time.
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